The 27 trustees of the Alumni Association voted unanimously not to certify the proposed chapter. It was the second year in a row the backers of the proposed chapter were rebuffed.

Jeff Petrie of San Francisco, a museum administrator who dreamed up the chapter and attended the trustees meeting with five fellow members of his group, called the vote "outright discrimination." No other chapter has ever been rejected.

But Skid Heyworth, a spokesman for the alumni association, said the group was denied because it is organized around "special interests" -- not geography, like all 94 other chapters. Fourteen of the group's 67 members live in the Bay Area. Also, it would be divisive by drawing members away from the San Francisco chapter and isolating gay graduates, he said.

"That's not consistent with the practices and not consistent with our mission," he said. "They should join the San Francisco chapter."

Petrie said the Castro is the group's geographic base and the proposed chapter would be open to all alumni. Three members are heterosexual. He argued it is unfair that a recreational vehicle chapter -- for migratory alumni who hold meetings at predetermined campgrounds -- is not considered "special interest" while his group is.

Petrie, 37, who graduated from the Naval Academy in 1989, said hiding his sexual orientation during eight years of service was emotionally taxing. The military's policy known as "don't ask, don't tell" prohibits gays and lesbians from serving openly in the armed forces. Petrie said he had hoped to found a group that was welcoming and comfortable for gay alumni. "We just want to support our alma mater openly and honestly and be free of discrimination," he said.

He first applied for recognition a year ago. After the alumni association rejected his application, also largely on the grounds that the group wasn't organized geographically, he changed the group's name from USNA OUT to the Castro Chapter, rewrote the bylaws to comply with the requirements and reapplied.

"This shows that while many people inside the military are changing their minds about gays and lesbians, a critical mass remains committed to the principle of discrimination even though discrimination hurts the military," said Aaron Belkin, director of the Center for the Study of Sexual Minorities in the Military at UC Santa Barbara.